Validation of a time-of-supply inventory policy through simulation

Abstract

A popular safety-inventory policy utilized in the apparel industry is time-of-supply. Time-of-supply specifies inventory held to protect against forecast error and supply disruptions in terms of safety-time rather than safety-stock. Determining the proper safety-time is critical to ensure customer service. This case study presents a method for determining safety-time for raw materials in an apparel manufacturing operation. Additionally, the results of a simulation study that validated the time-of-supply inventory policy are presented.